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Ensemble Nails Deal with Bristol-Myers Squibb to Discover New Drugs

Ensemble Discovery has secured an important partnership with Bristol-Myers Squibb to keep its engine of new drugs humming along in a downturn. The Cambridge, MA-based company will get a $5 million upfront payment, $7.5 million to pay part of its research expenses over the next two years, and may get milestone payments worth $29.5 million for every product that makes progress in development in the future.

It might not sound like much as far as biotech and pharma deals go, but this arrangement could establish a template for future deals with other pharma companies, says CEO Mike Taylor. It also gets Bristol to pay the salaries of a “substantial” number of Ensemble’s 35 employees, which is no small thing for a venture-backed company that’s trying to make it through a downturn, especially when it can’t hang its hat on any drug candidates creating tangible value in clinical trials.

“This is really important for us,” Taylor says. “This will allow us to expand, and really explore a range of targets that Ensemblins can address.” He adds, “You can always use more money in the bank.”

Ensemble was founded in 2004 to develop a new class of drugs, which it calls “Ensemblins,” based on research by David Liu at Harvard University. It has raised $32 million in total from Flagship Ventures, Arch Venture Partners, Harris & Harris Group, CMEA Ventures, and Boston University. But the last round was in November 2007—back when it was a lot more common for VCs to stick their necks out for tantalizing and unproven drug discovery technologies.

Since then, Ensemble has shown that it has solved some of the traditional challenges of making macrocyclic drugs, which was what impressed Bristol-Myers, Taylor says. These products are supposed to be mid-sized molecules, somewhere in between the conventional small-molecule pharmaceuticals and the much larger engineered proteins made by biotech companies. The Ensemble approach is supposed to combine the best feature of conventional small-molecule drugs—their ability to be made into oral pills—with some of the more precise targeting features of large-molecule biotech drugs, like antibodies or other genetically engineered proteins. In the past couple years, Ensemble has shown it can make this new class of drugs so they bind specifically and tightly with their targets, and can be efficiently scaled up, a traditional difficulty with macrocyclics, Taylor says.

Under the deal with Bristol-Myers Squibb, the goal will be to develop Ensemble’s brand of drugs against eight biological targets that have traditionally been inaccessible to conventional small-molecule drugs, Ensemble says. Some of these targets are reachable by biotech drugs, but are hard to treat using protein-based drugs, because they are lifelong chronic diseases, and most biotech drugs must be taken by injection.

Ensemble still has a lot to prove—it’s at least a year away from completing the necessary animal tests for its lead drug candidate before it can enter its first clinical trial. But the first candidate is a real biggie—an oral pill designed to block TNF, an inflammatory protein that’s a common culprit in rheumatoid arthritis. This is the same target hit by three blockbuster biotech drugs—Amgen’s etanercept (Enbrel), Abbott Laboratories adalimumab (Humira) and Johnson & Johnson’s infliximab (Remicade). None of those companies, or anybody else, has come up with an effective oral blocker of this target. Ensemble hopes to identify its lead candidate against this target later this year, finish up animal tests, and go to the clinic in another year, Taylor says.

That’s the sort of milestone that I can imagine might get the VCs to open up their checkbooks again. If not, the deal with Bristol is structured in a way that gives Ensemble the flexibility to do more deals with Big Pharma companies. “We’re going to continue to emphasize our business development activities,” Taylor says. “It gives us the room we need to continue to develop the technology.”